This article is based on data found in Bassi, A. M., Pallaske, G., Niño, N., & Casier, L. (2022). Does Sustainable Transport Deliver Societal Value? Exploring Concepts, Methods, and Impacts with Case Studies. Future Transporation, 2(1), 115–134
Transport is a crucial part of modern society, as it plays a key role in connecting communities and fostering development. However, its undesirable impacts on people and the planet are too great to be ignored: the transport sector is one of the main drivers of climate change and has significant negative direct and indirect impacts on human health. Unfortunately, these externalities are expected to increase because, as populations and cities grow, the world’s transport networks will need to be expanded to meet increasing demand. To solve this dilemma, attention has turned to sustainable transport and the potential to enhance and decarbonize current and future transport infrastructure in order to reduce negative externalities and improve climate resilience.
The challenges of modern transportation
The transport sector is one of the biggest contributors to negative environmental externalities and health impacts. For example, transportation emissions in the United States accounted for the largest portion of greenhouse gas emissions in 2019, producing nearly a third of the country’s emissions. Transport activities also negatively affect human well-being by causing premature mortality from pollution-related illnesses. In addition, road traffic accidents lead to around 1.3 million deaths per year. Despite these significant downsides, the world needs bigger, better, and more sustainable transportation systems that can meet growing demand while simultaneously addressing social and environmental challenges. This is true for both urban and rural areas. For instance, rural road transport in Africa often costs three to five times more than urban road transport. Finally, the transport sector is generally heavily dependent on fossil fuels, whose volatile prices affect the affordability of mobility services for consumers.
Making transport more sustainable
Sustainable transport aims to address the negative externalities of conventional transport, as it offers advantages in various development dimensions over traditional “grey” infrastructure. Sustainable transport encompasses more than just mobility: it is about ensuring the movement of people and goods in a safe, accessible, efficient, and resilient way while minimizing environmental impacts and contributing to the well-being of current and future generations. Promoting sustainable transport thus seeks to reinforce progress in other key areas of sustainable development, ultimately delivering value for money for citizens, governments, and investors. Therefore, when assessing the sustainability of a given transport system, considering its economic, social, and environmental parameters will make it possible to compare the multidimensional outcomes of conventional and sustainable transport in order to clearly determine which type optimizes the most benefits for society and the environment.
Applying the SAVi methodology to alternative transportation case studies
In our latest study on sustainable transport, IISD used the Sustainable Asset Valuation (SAVi) methodology to analyze three case studies of alternative transportation methods: road construction on the island of Borneo, Malaysia; a public bicycle-sharing (PBS) system in the city of Dwarka, India; and a Bus Rapid Transit (BRT) system in Dakar, Senegal. The SAVi methodology is particularly useful for this analysis, as it assesses transportation in a systemic way, considering economic, environmental, and societal outcomes within the project planning and implementation process. It also uses integrated system dynamics methods and quantitative models that are customized according to local parameters. The main objective of the SAVi methodology is to provide stakeholders and decision-makers with the necessary tools to assess transportation projects not only based on their economic and financial returns but also on their long-term societal benefits.
Results
The results of the SAVi analysis vary for the three case studies; however, they all demonstrate that the economic viability of transport projects changes depending on whether or not societal externalities are included in the assessments. In the case of Borneo, the study showed that constructing a new highway is not the most viable investment. Instead, investing in environmental remediation and cleaner energies offers a higher return, avoiding irreversible biodiversity loss and creating economic growth via a different, more sustainable path. Additionally, research on the PBS in Dwarka showed a multitude of benefits, including convenient, safe, and affordable transport; reduced emissions; fewer fatalities; and improved health effects. Yet, when assessed using a traditional financial assessment, all scenarios indicated it was not economically viable given that the total project costs were higher than the revenues. The project only became economically viable once the value of externalities was included in the assessment. Finally, the SAVi assessment of the BRT system in Dakar showed similar results: The project did not make sense from the perspective of a traditional financial assessment, but when environmental, social, and economic externalities were integrated into the analysis, its financial performance improved, indicating that the project is economically viable.
Recommendations and conclusions
Our study demonstrates that the inclusion of societal externalities is decisive in determining the economic viability of transport projects. In turn, this reveals the importance of externalities and risks beyond construction and points to their relevance in determining whether to invest in a project. The study proposes three main recommendations. The first is the need to encourage project assessments that include several performance indicators, reflecting the concept of sustainability early in the project implementation process. In addition, multidisciplinary teams should be formed to assess sustainable transport investments and prevent miscalculations of project costs and benefits. Finally, project assessments and policy analysis should be performed to consider the economic viability of the project construction and operations, as well as the societal value for the cost of the project, as presented in the study.
Ultimately, all infrastructure investments generate benefits and costs; that is why it is crucial to identify, quantify, and analyze both desirable and undesirable outcomes to ensure that infrastructure investments become enablers of sustainable development. The SAVi approach is especially well-suited for this task, as it is transformational in highlighting potential synergies between sustainable transport and economic performance, with an emphasis on environmental and social benefits.
This article was written by Sophie Blais and Ellyn Duke-Watson from the International Institute for Sustainable Development with contributions from Michail Kapetanakis.